2022 OUTLOOK
As people return to work and real estate agents open their doors once again after a well-earned break, I am often asked what I think will happen in 2022. The Northern Beaches appear to still have their own little unique real estate bubble, and while there appears to be more properties on the market than this time last year, there’s still not enough for the buyer demand we are seeing.
People from all over Sydney decided to move to the beaches for a lifestyle change, seeking solace and space. Because Covid-19 has changed the way we now work, demand for beach properties will continue to rise in 2022, but possibly not to the extent that it did in 2021.
Coastal developments are booming as a result of population growth and a pandemic-related desire to be closer to the water. This is likely to dominate most investors' minds over the next year. This phenomenon is largely contributing to The Beaches' phenomenal growth.
Banks have been steadily increasing fixed interest rates since November and serviceability with the major banks has declined ever so slightly. However, borrowers can still access relatively cheap debt with variable rates under 2% p.a.
Our four major banks updated their property price forecasts for Australia’s capital cities at the end of last year in response to the market's resilience in the face of extended lockdowns.
1. NAB has forecast a 4.9% lift in property values in 2022 and a 4% fall in 2023.
2. ANZ’s outlook is a 6% price hike this year and a 4% drop in 2023.
3. The CBA expects house prices to rise 7% in 2022, and 10% next year.
4. Westpac expects an 8% rise in 2022 and a 5% correction in 2023.
Economic forces will be different over the next two years than in previous years, and with a federal election this year, there may be a few bumps in the road in terms of property and finance.
What I am seeing more of is people wanting to access their equity in their owner-occupied property and buying more property outside of Sydney. Leaving major cities for coastal enclaves is a growing attraction as COVID empowered Australians desire to make a sea or tree change.
With borrowing costs lower than they have ever been, and the Reserve Bank of Australia’s (RBA) assurance that interest rates will not rise for a number of years, you can achieve that lifestyle change and be closer to the waters by using your home equity.
But even if you have a lot of equity, borrowing against it isn't always a given. Several factors will be considered by the bank, including:
Your earnings
Your age
The number of children you have
Any additional debts
Remember to be cautious. If you don't have any funds aside from your home equity, it's risky to invest in real estate with every cent of your usable equity.
If you’re familiar with what we do, we are great believers in using home equity to achieve real wealth and a lifestyle shift if that is what you desire.
If you've owned your home for a few years, there's a good chance you've built up some decent equity. When it comes to property investment or levelling up, this equity is a valuable resource.
We love helping clients expand their property portfolio.
The best time to invest is as soon as you can afford to. If you haven't checked to see how much equity you currently have, let’s get this first step underway.
Want to have a chat to see what’s possible?